'Modern Family' Feud

Modern Family has exploded into modern warfare. The cast of ABC's top-rated comedy took the rare step July 24 of suing the studio that employs them, asking a court to void their contracts with 20th Century Fox Televsion amid a heated salary renegotiation that threatens to delay the start of the new season.

Reps for the six adult castmembers -- Julie Bowen, Ty Burrell, Jesse Tyler Ferguson, Ed O'Neill, Eric Stonestreet and Sofia Vergara -- have been working throughout the summer on securing big raises for the Emmy-winning ensemble, five of whom made about $65,000 per episode during the 22-episode third season, according to sources. (O'Neill, a big TV star pre-Family, made around $105,000.)

Actors on hit shows often renegotiate salaries between the third and fourth seasons, securing escalating raises in exchange for agreeing to stay with the series for additional years, and as late as July 21, sources close to the talks told THR that new deals were in the works and the actors likely would kick off the upcoming season with a scheduled script read July 24. But when 20th TV chairmen Gary Newman and Dana Walden sent the studio's latest salary offer July 23, reps for the actors found it lacking. (One called it "offensive"; another said it was "a total nonstarter.") Several sources close to the negotiation tell THR that the offer the five non-O'Neill actors received was as follows: $150,000 per episode plus a $50,000 bonus for season four; $200,000 per episode for season five; $225,000 for season six; and salaries rising to $325,000 per episode by an anticipated season nine. A rep for 20th TV declined comment.

The cast, negotiating together in a similar manner to how the Friends actors famously employed an all-for-one strategy, is seeking significantly more in the show's later years, according to sources. So instead of showing up for the table read, five castmembers hired litigator Jeff McFarland of Los Angeles' Quinn Emanuel firm and filed a blistering 16-page lawsuit asking a judge to end their contracts because they are "illegal and void under California law." (O'Neill, who actually had showed up for the table read and was not initially listed as a plaintiff, later confirmed he would join the suit in solidarity with his co-stars.)

At the heart of the suit is the section of California law dubbed the "Seven-Year Rule," which prohibits personal service contracts that last longer than seven years. The law has a long history in Hollywood, having grown out of challenges to the old "studio system" by actress Olivia de Havilland and others who sued to prevent talent from becoming bound to film studios for years and years. In this case, the Modern Family cast claims that their contracts, first signed in 2009 (Vergara's dates to 2007 due to a pre-Family holding deal), bound them for the pilot plus seven seasons of the series, which they believe violates the rule.

The stakes are high, to be sure. An instant hit when it debuted in 2009, Modern Family is a profit center for ABC and 20th TV, regularly drawing 13.1 million viewers last season. In 2011, the show generated $164 million in ad revenue for ABC, up 40 percent from a year earlier, according to Kantar Media. And 20th has sold it to USA Network in a rich syndication deal valued at close to $1.5 million per episode, according to sources. At the same time, the show has won the outstanding comedy series Emmy for the past two years and picked up 14 nominations July 19, positioning it as the favorite to win again.

Newman and Walden are said to be "furious" at the lawsuit and have told sources that they will not negotiate with actors who are suing the studio. But others close to the show say the legal action is just part of the negotiation and that the cast will be back to work this month. Says one dealmaker, "No one is foolish enough to make this show go away."